On August 9, 2011, the Spanish Government issued a royal decree law that introduces important temporary changes to the corporate income tax legislation which are aimed at reducing the budget deficit. These measures will be applicable for fiscal years 2011, 2012 and 2013, as follows:

  • Increase of the payments on account of corporate income tax: • companies with a turnover below €20 million will continue to make payments on account at the rate of 21 % ;
  • companies with a turnover between €20 and €60 million will be subject to a 24 % rate ; • companies with a turnover of €60 million or more will be subject to a 27 % rate.
  • Limitation of the offset of carry forward tax losses:
  • companies with a turnover between €20 and €60 million will only be able to offset carry forward tax losses up to 75 % of the current year’s tax base ;
  • companies with a turnover of €60 million will be limited to 50 % of the current year’s tax base ;
  • Financial goodwill will only be amortisable at the rate of 1 % p.a. (compared to the standard amortisation rate of 5 %).  

In order to limit the negative effects of these measures, the tax loss carry forward period is extended from 15 to 18 years for all taxpayers.